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You can get there from here.


Settled because of its sheer isolation from the rest of the country, Utah is now only as remote as 160 flights a day, and more than 1,500 freight companies, miles of rail lines, and three major interstates allow. In fact, most Utah businesses--including the Utah companies on this year's Inc. 500 list--sell a good share of their products out of the state. And that represents specific challenges.

"The availability of transportation has to be there. It doesn't do any good to be strategically located if you have to pay a premium to move your product," says Gary Bettencourt, president, All American Gourmet. Since 1986, the company has manufactured and distributed its frozen entrees and sidedishes from its plant in Clearfield.

By Air

The Salt Lake International Airport is the most important transportation criteria for most existing and relocating businesses looking to land in Utah, whether they transport executives or day planner books.

"The airport will work very closely with economic development entities and any community in the state if they were trying to lure a business. We'll make a presentation to the client about our air service, reliability, and what the airport would do for their business if they come. If they approached us, we would support them all we could, even confidentially," says Lou Miller, director, Salt Lake Airport Authority.

Salt Lake's is a relatively new airport. Terminal Two has been expanded six times already since it was built in 1978. The Salt Lake International Airport recently completed $60 million in improvements to serve local residents. Utahns have a new parking structure, passenger sky bridges, convenient exit and entrance roads, an expanded baggage claim area, and food services to "provide the passenger with more of what they want and are used to seeing in other airports," says Miller, who points out that only local contractors were used to build the projects.

Still Expanding

1992 will see a third runway built to increase capacity and reduce flight delays. When it's foggy, the airport's operations are limited to just one of its two runways. This happens only 7 to 8 percent of the time, Miller says. The new runway will be complete by the end of 1995 and will cost $107 million. Design of the runway will begin this summer, and will include wetlands mitigation.

The 25th-busiest airport in the United States, Salt Lake is also one of the most reliable. "It's rare that Salt Lake closes all the way. Even in cold weather at below freezing temperatures, we can keep it operating, even if it's at a snail's pace," says Miller. Its record for on-time arrivals and departures, however, has slipped in recent years, because of Salt Lake's need for a new runway.

"Anything that flies today in the world can land on our runways. Right now 747s don't come because there's not the demand. As market demand grows, however, we'll see the L10-11 for 200-300 passengers, just not jumbo jets."

Denver's new Stapleton airport will open in 1993 or 1994. "If Continental and United Airlines continue to operate out of Denver, it would encourage Delta to increase service in Salt Lake. The more Denver grows, the more Salt Lake will grow," Miller states.

Moving People and Product

Seven major airlines and three regional carriers serve Utah, in addition to several charter and cargo lines. In the first nine months of 1991, the airport moved 9.6 million passengers, a 3.75 percent increase over the previous year. It handled 91.2 million pounds of air mail, an increase of 50 percent; and it took 117.3 million pounds of cargo.

Passenger traffic slowed nationally last year, yet Salt Lake was 5 percent ahead of the previous year. The numbers of destination travelers is growing faster than connecting passengers, a sure sign that the economy is ready for take-off. "Air traffic is a definite indicator of what's happening in the economy, both for pleasure and business," says Miller.

About 70 percent of Delta's passengers at Salt Lake International are connecting passengers. They spend an average of 31 minutes waiting in Salt Lake's airport to change planes. Utah information centers and a new Utah Products Shop sell Utah to its temporary visitors. The new store will sell only made-in-Utah products, including crafts, specialty foods, clothing, and artwork. Interested businesses may contact Terminal Gifts at the airport.

Paving the Way

Utah will not see any new roads built in the next six years, says Gene Findlay, director, Utah Department of Transportation. Congress recently apportioned $838 million to Utah, our state's share of the Highway Trust Fund. "We're grateful for that, but most of it will be spent just maintaining the road system we have.

States pass on to the federal government the tax monies collected at the gas pump. A spokesperson in Congressman Wayne Owens' office in Washington says the funds distributed to Utah equal $1.07 for every highway tax dollar collected in the state, and represents "a big step backward" from our historic average of $1.26 return on our investment.

With the money, Findlay's crews will be able to widen U.S. 89 through Sardine Canyon from Brigham City to Logan and continue widening the highway through Provo Canyon. "There's not enough money for us to begin to tackle the big-ticket items like widening I-15," he added.

With ground transportation like UPS and Federal Express available, Utah companies can get their products out from all corners of the state. Chums, located in Hurricane not too far from I-15 outside Zion National Park, ships millions of its eye-glass retainers via UPS, the Postal Service, and Federal Express. From Logan, Miller Beef sends out 150 truckloads of meat each week.

From Blanding, Cedar Mesa Products ships hand-painted Native American pottery through a network of wholesalers all over the nation. "Shipping is not a problem for us, as long as the recipients are served by UPS; they're the only ballgame in town," says Cedar Mesa's J. B. Lyman. Transporting the pottery from Blanding takes just about one week to reach most parts of the country. Overnight and second-day delivery of the heavy pottery is prohibitively expensive.

Also in Blanding, San Juan Transition Center assembles electronic printed circuit boards, music mixers, and lighting supplies--mostly for manufacturing companies in Las Vegas and California. The company sends its products via UPS, unless something "absolutely has to be there" the next day. "Down here the real problem is with outgoing freight, says Lloyd Cartschner, president. "There's no out-bound overnight delivery service here except for priority express mail, and that's only good in certain delivery areas."

Federal Express does not pick up packages from the southeastern part of the state, even though they do deliver there. "Even if I have a package labeled and all ready to go, they can't take it," Cartschner states. One of his best customers--in Las Vegas--is upset with his company because he couldn't ship their product out on schedule. "My clients are used to overnight delivery service in other places; but I have to tell them up front that I'm in a real hole in terms of shipping freight." For in-bound freight, Cartschner says he's "at the tail end of everyone's delivery routes." Even packages that are guaranteed to arrive by 10 a.m. don't come until 2 or 3, he says. "It puts me another day behind schedule. You really have to know the shipping business here." To compensate, Cartschner takes pride in his company's efficient turnaround time. "We do a good job for our clients." He won't relocate his business, however, because of the size of the workforce available to him. "I have 40,000 Navahos living within 30 miles, 40 percent of whom are unemployed. I have to turn away 30 to 40 people each week."

But, some Utah companies admit, being landlocked in Utah does present geographic challenges. "It's inefficient and more costly when you have to bring raw materials in, then turn around and send the finished product back out if you sell all over the country," explains Barry Mower, president, Lifetime Products. His company manufactures basketball equipment in Clearfield. "And some things--like steel tubing--are not found at competitive prices in Utah."

"The cost of transporting supplies in and out of this area is something [businesses considering relocation] worry about," admits John Williams, executive director, Five County Association of Governments, an organization promoting economic development from Boulder to St. George. "But transportation costs have decreased compared to the overall cost of manufacturing. With interstate motor freight companies, it's just as fast to ship products from St. George to Los Angeles as to go across the state of California."

To beat competitors located in other parts of the country who don't have the additional shipping costs, Utah manufacturers rely even more on the innovation of their product and the service they offer their customers.

Riding the Rails

Three railroads serve Utah businesses. Geneva Steel in Orem moves so much cargo by rail, it has its own rail system, control tower, and switching house. Five locomotives haul raw materials and finished product along 160 miles of track within the plant. major rail lines converge near the Western markets. Geneva transports 25 percent of its annual product (sheet, plate, and pipe steel) to California via the rails. The Utah company shipped steel to four foreign countries (Canada, Mexico, Argentina, and Thailand); 42 states; and 366 customers during 1991.

Located in Orem on the edge of Utah Lake, Geneva is one of the nation's only profitable steel manufacturers, according to a recent article in the Wall Street Journal. Clark Caras, Geneva's manager of media relations, says the steel industry is "suffering in a major way from the recession." Geneva, though it is selling steel, is receiving the same rate for its product as 12 years ago. "Yet the price we're paying for raw materials and transportation has gone up dispro-portionately."

People often wonder why geneva is located where it is--seemingly remote from its customers and source of materials. "Franklin D. Roosevelt actually selected this site, because we are within a 100-mile radius of all the raw materials we need to make steel," Caras points out.

Though Geneva imports some iron ore from Minnesota and some coal from Colorado, the plant prefers to use Utah's low-sulphur coal. "Most of it comes from Carbon and Emery Counties--by rail." Caras estimates Utah's supply of raw materials will allow the company to make steel for another 100 years.

Steel from Geneva is used to make guard railing along highways, bridges, barges, railroad track, train cars, irrigation pipes, and even automotive oil filters. Locally, Jetway Systems uses Geneva's steel in constructing passenger boarding bridges. Lazy Boy in Tremonton uses steel plates from Geneva to reinforce its chairs.

Caras likens Geneva to a self-contained community. "We have products leaving every day and raw materials arriving every day."

To beat competitors located in other parts of the country who don't have the additional shipping costs, Utah manufacturers rely even more on the innovation of their product and the service they offer their customers.

PHOTO : Even businesses in remote corners of the state have means to move their products all over the world.
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Title Annotation:availability of and access to transportation prove essential to Utah business and industry
Publication:Utah Business
Article Type:Interview
Date:Feb 1, 1992
Previous Article:Water wars.
Next Article:Vital connections.

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